Turkey Trade Advantage in a Shifting Global Order
As U.S. President Donald Trump’s sweeping tariff hikes shake the foundations of international commerce, Turkey trade officials are spotting a rare opportunity amid the turbulence. While many economies face sharp increases, Turkey received a relatively moderate 10% tariff—lower than the 20% imposed on EU goods and 34% on Chinese exports.
This global trade realignment, though risky, could allow Turkey trade to reposition itself as a key player in manufacturing and supply chain logistics. Finance Minister Mehmet Simsek emphasized that Turkey’s domestic demand-driven economy makes it less vulnerable to such external shocks.
Turkey also benefits from free trade agreements with 54 non-U.S. and non-EU countries, accounting for 68% of its total exports. Its customs union with the European Union further reduces trade barriers and enhances competitiveness.
Low Tariffs as a Strategic Boost
Turkey’s relatively low tariffs may offer a comparative advantage in selected industries. Minister Simsek noted that this could especially benefit sectors such as manufacturing and automotive components.
Trade Minister Ömer Bolat described the 10% levy as “the best of the worst.” Although Turkey is pushing for negotiations to reduce or remove the tariffs, the current setup still favors Turkey trade in several export categories.
However, economist Can Selcuki warns of indirect risks. He points out that Turkey exports many intermediate goods to the EU, which now faces higher U.S. tariffs. This could reduce European demand for Turkish components. Still, Selcuki affirms that the broader opportunity outweighs the short-term challenges.
Why Turkey is a Manufacturing Magnet
Turkey’s geographic location and robust industrial capacity make it a top candidate for supply chain restructuring. As global firms reevaluate production hubs to avoid U.S. tariffs, Turkey emerges as an attractive alternative.
Selcuki explains, “A lot of manufacturing will have to be relocated. Turkey is uniquely positioned to gain from this reorganization.”
This sentiment is echoed by Istanbul Chamber of Commerce President Şekib Avdagic, who noted that companies in highly impacted nations like China may shift operations to Turkey to access the U.S. market under more favorable terms.
Attracting Investment and Managing Risks
To fully harness the benefits of the tariff shift, Turkey must build a more investment-friendly climate. Gürkan Yildirim, President of the Turkish Young Businessmen Association, believes that Turkey could attract significant foreign direct investment if it ensures economic stability and regulatory clarity.
Economist Selva Bahar Baziki of Bloomberg Economics highlights that even including indirect trade routes, less than 2% of Turkey’s GDP is exposed to U.S. demand. Although sectors like metals and textiles might experience strain, the overall economy is not overly dependent on the American market.
Moreover, concerns over inflationary pressure due to currency volatility appear unfounded. Baziki argues that tariffs are unlikely to cause further inflation through exchange rate fluctuations.
For more information about investment in Turkey, check out Turkey for Business
